Netflix is considering buying Warner streaming and studios. Investors like the idea

Netflix is exploring the possibility of buying part of the business of Warner Bros. Discovery, namely studios and streaming, to strengthen its position in the entertainment industry, sources told Reuters. The acquisition would give Netflix control of successful Hollywood franchises. Shares of both companies rose in opening trading on Oct. 31.

Video streaming service Netflix is exploring the possibility of buying the studio and streaming business of Warner Bros. Discovery, Reuters reported , citing sources familiar with the talks. According to them, Netflix has engaged investment bank Moelis & Co. to evaluate the potential offer and gained access to the "data room" - a special repository of financial information needed to prepare a deal.

Buying the Warner Bros. studio business would give Netflix control of some of Hollywood's most successful franchises, including the Harry Potter films and DC Comics. Warner Bros. Television Studios also produces many of Netflix's popular series, including original projects Running Point, You and Maid. HBO and its related streaming services will add prestige dramas and new subscribers to the platform, according to Reuters.

Netflix CEO Ted Sarandos told investors last week that while the company has traditionally focused "more on creating than buying," it is considering potential acquisitions based on its capabilities and how much they could strengthen Netflix's entertainment offerings.

Sarandos clarified that Netflix is not interested in the cable networks of Warner Bros. Discovery, including CNN, TNT, Food Network and Animal Planet.

Netflix shares jumped 2.3 percent at the opening of trading on Oct. 31, thanks in part to the company's 10-to-1 stock split announced Oct. 30. This move does not fundamentally change the position of the company, but may make expensive shares more accessible to retail investors, notes CNBC. The issuer itself attributed the decision to a desire to reset the market price of the company's common stock to a range more acceptable to employees participating in the stock option program."

For shares of Netflix this year has become a record, at the close of the market on October 30, their price since the beginning of the year rose by more than 40%. At the same time, 38 analysts out of 53 analysts who track quotes of the company, still believe in their growth and advise to buy, follows from the data of MarketWatch. 13 - recommend to hold these securities and two - to sell.

Shares of Warner Bros. Discovery are up 2%. They are covered by 29 analysts, of which 15 have given a buy recommendation. 13 are neutral and only one is bearish.

October 21, it became known that Warner Bros. is considering a complete sale of the business due to interest from potential buyers. Among such - called just Netflix, as well as Comcast. Earlier it was reported that the head of Paramount Skydance David Ellison is also negotiating the purchase, but in October Warner Bros. rejected three proposals Paramount because of the low price. The most recent one suggested a price of just under $24 per share and included 80 percent cash, CNBC wrote .

The board of directors of Warner Bros. Discovery has been discussing several strategic scenarios, including the already announced plan to split the company into two publicly traded entities by 2026, which was revealed back in June. Under that plan, one company would combine the movie production and HBO Max service, while the other would focus on cable channels, including CNN, to separate the fast-growing streaming business from the slower-growing cable networks.

A potential sale or split would be one of the most significant events for the global media industry, and could prompt other players to rethink their structures, Bloomberg emphasized.

This article was AI-translated and verified by a human editor